The EU car industry needs a Super Bowl moment

AUTHOR: Tim Gore

Pick just about any measure of climate policy, and the EU leads the US. It has a higher share of renewable energy in electricity generation, better energy efficiency, and per capita emissions less than half those of the US. But on cutting emissions from transport, Europe could soon find itself playing catch-up.

Transport is the biggest, growing source of emissions on both sides of the Atlantic, most of which is from cars. With power sector emissions now falling fast in both markets, the sector is the biggest climate nut to crack over the next decade. In the US, the Trump Administration’s rollback of the Obama Administration’s emissions standards made the task even harder. But over the last six months, the auto industry has pivoted. For evidence, look no further than the General Motors viral Super Bowl advert last week.

In case you missed it, General Motors used the biggest prime time television advertising slot of the year to announce plans to only sell electric vehicles by 2035. It didn’t come from nowhere, but it does signal a seismic shift in the US automobile market is about to take place, and a far faster transition to electrification than seemed plausible a year ago.

Before California announced in September last year that it would end the sale of internal combustion engine cars (ICEs) by 2035, General Motors didn’t much like the idea. But the election of the Biden Administration seems to have forced a rapid re-think. Tesla’s stock price – now higher than all other car manufacturers combined – surely helped focus minds too.

So what does this mean for Europe? It’s no coincidence that the light-hearted General Motors advert pointed to Norway – where electric cars reached a 54% market share last year – as the benchmark for rapid vehicle electrification, not an EU Member State. And Norway’s not the only EU neighbour forging ahead, after the UK’s pledge last November to end ICE car sales by 2030.

The ball is now firmly in the EU’s court. The good news is that the European Commission has launched its sustainable mobility strategy, including the revision of the CO2 standards for light vehicles. But to claim a position as a global climate leader on transport, EU leaders must push for some big decisions this year. Europe needs a Super Bowl moment.

The biggest decision is on the deadline for ending ICE sales in the EU market. 2035 is the latest credible date available after the General Motors and California commitments. Given cars have an average lifetime of around 15 years, any later would not be compatible with reaching net zero emissions by 2050 anyway. Many EU Member States want to go faster and should be allowed and indeed encouraged to do so. Emissions standards should be strengthened every year until the deadline is reached.

The EU needs a robust plan to tackle transport inequality

But the EU can do much better than simply charting a path to full electrification. To set the new benchmark of climate leadership, EU transport policy must address at least three critical areas.

First, the EU needs a robust plan to tackle transport inequality. Transport is by far the most unequal sector of carbon consumption in Europe and the US. Richer, higher emitting citizens buy bigger cars and drive them further, and evidence suggests men do so far more than women. Yet many low-income Europeans, especially in rural areas, are dependant on cars for their livelihoods.

Climate policies must be designed to target the luxury emissions of highly polluting cars like SUVs – the only sector of the economy in which emissions grew during 2020 – without penalising those on lower incomes. The best approach is through a broad package of environmental and labour tax reforms that ensures lower-income groups are net beneficiaries.

The EU must ensure the transition to electrification is just

Second, the EU must ensure the transition to electrification is just. The transport sector is a huge employer in the EU, generating over 13m jobs, 50 times more than the coal industry. And while coal jobs are in structural decline, employment in the transport sector has never been higher. No job in the sector will remain unaffected by the transition, and policymakers at all levels must insist on a strong framework of social dialogue to ensure workers are at the forefront of change.

Third, the EU must recognise the strict materials limits to simply replacing the ICE car fleet with an electric one. Lithium-ion batteries already account for around half of the world’s scarce supply of cobalt, the mining of which has been widely linked with human rights violations in the Democratic Republic of Congo and elsewhere. Mining in the ‘lithium triangle’ beneath the dry salt flats of Argentina, Bolivia and Chile is already depleting the groundwater on which local communities depend.

The EU must recognise the strict materials limits to simply replacing the ICE car fleet with an electric one

Europe should reject a transition based on limitless material extraction and establish the world’s first circular transport market. This means focusing on extending vehicle lifetimes, using lighter weight designs, and reuse and remanufacturing of materials. But even more importantly, it means redesigning mobility around public transport, cycling, walking and – where necessary – car sharing over ownership. All of this can help slash emissions from the sector, and the cost to EU citizens of moving around.

The car has been the symbol of the 20th-century economy in the US and Europe: a labour-intensive manufacturing juggernaut supplying insatiable consumer demand. But electric or not, cars cause thousands of deaths per year in road traffic accidents, contribute to unhealthy sedentary lifestyles and encourage social isolation. Beyond the race to electrification, the EU’s Super Bowl story should be about re-imagining the transport sector. If it gets the mobility transition right, the EU will lead the world in building a fairer, healthier and fully decarbonized economy.

Tim Gore is the head of the Low-carbon Circular Economy (LCCE) programme

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